Thursday, July 5, 2012

The
government is preparing a 'populist and expansionary' budget — that will exceed
the ceiling of Rs 429 billion — due to relief packages to the poor and the
added burden of an election, but the opposition claimed that the 'expansionary'
budget will not provide relief to the poor as inflation will hurt them dearly.
"The government has been introducing relief packages that might increase
the size of the budget from the current ceiling of Rs 429 billion," said
vice chair of the National Planning Commission — the government think tank —
Deependra Bahadur Kshetry at a pre-budget interaction at Reporters' Club.
The government will bring new programmes to identify people living below the
poverty line and provide them with a minimum of 100 days of employment in a
year, and open subsidised shops to provide relief to the poor populace, he
said, adding that the new pro-poor programmes — that were supposed to come through
an Act earlier — and elections will increase the size of the budget to above Rs
440 billion. "The National Planning Commission had not envisioned the
election — while fixing the budget ceiling for fiscal year 2012-13 — that will
add Rs 10 billion and the payment for the ex-combatant of Rs 3 billion more to
the budget outlay."
Economist Dr Chiranjivi Nepal claimed that the expansionary budget will push
the inflationary pressure up making the lives of the poor more difficult.
"The bigger the size of the budget, the more will the poor populace suffer
because of rising prices due to excess money supply," he added.
Similarly, the budget of the current government will also be without ownership
like the current one due to political uncertainty hitting its implementation,
if the incumbent government brings a full-fledged budget," he said,
suggesting the UCPN-Maoist-led government to bring a special budget for regular
expenses like social security, salary, debt servicing and projected costs to
the national priority projects only.
The caretaker government of Dr Baburam Bhattarai might misuse the resources and
involve in gross financial indiscipline in the absence of the parliament and
legitimate budget oversight agencies, said Nepal, adding that the government
has no right to distribute the taxes paid by the people to its party cadres in
the name of support and relief to the poor.
However, economist Dr Dilliraj Khanal said that the budget size has to increase
much more to meet the expectations of the people and absorb the shock to the
economy. "The economy is passing through a difficult phase and the
government needs to provide a cushion," he said, adding that a
conservative budget of Rs 429 billion will not help sustain the economy.
Similarly, the first governor of the central bank Himalaya SJB Rana said that
the government should bring a full-fledged budget through political consensus.

Government in mood of confrontation ?
KATHMANDU: It seems the government is heading towards a confrontation with the
President. The 22-opposition parties including the big two parties, Nepali
Congress and CPN-UML, on Wednesday, met President Dr Ram Baran Yadav and asked
him in writing to not accept a full-fledged budget brought through ordinance
and allow the government to bring only 'one-third budget' as the current
government is only a caretaker one and can be changed anytime if there is
political consensus among the parties. "The new national consensus
government should bring a full-fledged budget," they argued. "The
President should not accept the full-fledged budget through ordinance,"
suggested economist Dr Chiranjivi Nepal. However, economist Dr Dilliraj Khanal
and National Planning Commission vice-chair Deependra Bahadur Kshetry opined
that the President should not stop the full-fledged budget ordinance, thereby
pushing the country to a political confrontation. "If the President does
not approve the government's budget ordinance, there will be
confrontation," said Kshetry, claiming that the government will bring a
full-fledged budget through ordinance as the possibility of a consensus within
two weeks seems far-fetched.